The New York Observer's summary yesterday:
Federal funding crunch means Forest City Ratner won't be able to build 3,000 affordable-housing units at Atlantic Yards, fulfilling the prophesies of its opponents. [Brooklyn Paper]
But the Brooklyn Paper article reported only that a federal cash crunch threatens the promised 2250 units of affordable housing, adding some more voices to a story I reported a week ago.
That doesn't mean the promised affordable housing is dead. After all, a Democratic administration in Washington just might allow a state like New York much more capacity to authorize tax-exempt bonds.
The value of delay
And the clogged funding pipeline may make the delay caused by lawsuits that much more palatable, no matter how much Forest City Ratner protests. (Forest City's priority is the arena, which comes with a $400 million naming rights deal.)
Either way, the ten-year plan to build 2250 affordable units almost certainly won't be fulfilled by the 2016 timetable announced when the project was approved. It could take another five years, or ten, or longer, and Forest City is a patient company when it comes to big projects. In fact, if you take December 2003, when the project was announced, as the starting date, the delay stretches further.
The Brooklyn Paper reported inaccurately (and in an editorial) that Atlantic Yards developer Bruce Ratner could get out of the affordable housing promise by paying a $500,000 penalty.
The Paper's correction: In fact, under the Community Benefits Agreement, there is no penalty if Ratner does not build the units.
That's not the full story. As I reported in September 2006, the CBA provides for binding arbitration, as well as the opportunity to go to court to enforce the agreement.
An ACORN spokesman told me:
I can safely say that if the MOU were not fulfilled ACORN could seek injunctive relief. The legal standard for obtaining this kind of relief is (a) likelihood of success on the merits and (b) irreparable injury if FCR were to proceed without compliance which cannot be satisfied with monetary damages. While courts tend to favor monetary damage remedies, we believe we have a strong legal argument for injunctive relief since the goal of the parties to the CBA is community benefit rather than financial gain and it would be difficult to quantify the damages arising from the breach in financial terms.
That could get complicated, since Forest City Ratner could say it wanted to build the housing but just couldn't get the bonds. And I've been told by Empire State Development Corporation officials that state documentation also would lock in the affordable housing, beyond the CBA--though no such documentation has yet emerged.
Either way, "no penalty" seems to me a significant shorthand for a process that might leave Forest City Ratner with some major obligations.